Kenya Airways’ Planes Ceased Due to Leasing Fees Fight

Kenya Airways Planes Ceased Due to Leasing Fees Fight

Kenya Airways’ plans to cut the cost of hiring their jets have been denied by two aircraft leasing businesses in a row, putting many planes on the ground as the airline undergoes reorganisation.

Allan Kilavuka, Kenya Airways’ chief executive, claimed the two lessors were opposed to their revised payment terms, which forced them to stop their jets at Nairobi’s Jomo Kenyatta International Airport (JKIA).

The other six lessors are open to negotiation and have not grounded their planes, while not completely agreeing with the airline’s proposed decreased payment terms.

To avoid jeopardising discussions, KQ, as the airline is called by its international code, said it couldn’t divulge the number of planes affected.

On the heels of the multi-billion shilling rescue of KQ, the government is pressing for its reform.

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Under the bailout terms, KQ will be compelled to decrease its network, run a smaller fleet, and perhaps lay off additional employees.

We are requesting that they cut their costs, but some are unwilling to accept the parameters we have proposed. “We want to put a halt on our relationship till we agree,” Kilavuka said on Wednesday.

To avoid jeopardising discussions, KQ, as the airline is called by its international code, said it couldn’t divulge the number of planes affected.

On the heels of the multi-billion shilling rescue of KQ, the government is pressing for its reform.

Under the bailout terms, KQ will be compelled to decrease its network, run a smaller fleet, and perhaps lay off additional employees.

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“We are requesting that they cut their costs, but some are unwilling to accept the parameters we have proposed. “We want to put a halt on our relationship till we agree,” Kilavuka said on Wednesday.

The new deal, which has saved the airline billions of shillings in leasing fees, has seen KQ only pay the lessors when the aircraft is flying, a departure from the previous agreement where KQ would still pay the lease amount even if a plane was idle.

But some lessors have now rejected the plans saying the initially agreed hourly rates cannot be lowered further.

Kilavuka said the planes whose lessors are in dispute with KQ over the new payment terms include Boeing 737 narrow-body jets, Boeing 787 wide-body jets and Embraer.

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A huge number of the planes mainly fly routes such as Southern Africa, West Africa, Dubai and Mumbai.


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